By Martin Kelly
The Permanent Secretary to the Treasury has confirmed that in the event of independence the rest of the United Kingdom will be liable for all of the UK’s debt.
Yesterday, Sir Nick Macpherson, was giving evidence in front of a House of Commons Select Committee when he was asked about the £1.2 trillion of debt the UK currently owes – almost £19,000 for every person in the UK.
Responsing, the Treasury Chief said: “Earlier this year the government made clear that existing debt was issued by the United Kingdom and United Kingdom stands behind that debt.”
The comment confirms a statement issued earlier this year by the Treasury which said it would assume responsibility for all debt accrued by the UK up to the date of the independence referendum. The statement, issued in January, was a response to market concerns over comments from the three London based parties that they would refuse to formally share the pound with a newly independent Scotland.
The Scottish Government has proposed taking an equitable share of the debt as part of negotiations after a Yes vote. However it views both the pound and the publicly owned Bank of England as assets which belong to Scotland as much as to the rest of the UK.
Commenting, Stewart Hosie MP, SNP Treasury spokesperson said:
“This confirmation from Sir Nick to the Select Committee is important in that once again it confirms the Treasury position, as they outlined in January . That is that the UK has responsibility for the debts built up by the UK.
“It is one of the key reasons why a currency union is firmly in the interests of an independent Scotland and the rest of the UK because if Westminster refused to share financial assets with Scotland, it follows that the rest of the UK would be saddled with all the national debt – adding an extra £5 billion a year in debt payments to taxpayers south of the border, and that has been outlined once again by Sir Nick MacPherson.”
The Permanent Secretary also appeared unsure whether there were contingency plans in place to deal with the aftermath of a Yes vote saying that, “while the Treasury did not have contingency plans, it had contingency plans for contingency plans.”
Mr Hosie added:
“With just under three weeks to go the referendum and the polls tightening by the day Sir Nick seemed thoroughly confused over whether Westminster is planning for a Yes vote claiming they have contingency plans for contingency plans, only for Downing Street to say there are no contingency plans.
“The momentum for a Yes vote is clear as can be seen in the polls and in communities up and down the country. To have No plan B from Westminster just seems like an extraordinary disservice and complete complacency.
“Westminster can’t stop Scotland using the pound – as Alistair Darling admitted in last week’s TV debate – and we are the ones making the entirely reasonable proposal to share both debt and the assets. We already know that the economics will trump the bluffing of the No campaign parties after a Yes vote, because an unnamed UK government minister let the cat of the bag when they said ‘of course’ there will be a currency union.”
Unionists have pinned their hopes on the issue of currency persuading Scottish voters to reject independence. However the campaign strategy took a massive hit when Better Together leader Alistair Darling let slip a newly independent Scotland could not be prevented from using the pound.
The admission followed months of official leaflets having been distributed by the No campaign which claimed the opposite.